Impact of Corporate Social Responsibility on Profitability of Islamic and Conventional Financial Institutions

The purpose of this paper is to compare the level, impact of corporate social responsibility (CSR) among Islamic and Conventional Banking system in relationship with earning per share (EPS), return on asset (ROA), return on equity (ROE). An empirical analysis is conducted, based on the annual reports of 4 banks for the year 2010-2011. To verify the relationship between EPS, ROA, ROE and CSR regression models are used. The results shows that there is lack of CSR in Pakistan and the regression model shows that there is positive relationship between profitability (EPS, ROA, ROE) and CSR practices. The Financial institutions which implements CSR in theirs operations earn more profit for the long term periods.